(dissenting).
The action is not on express contract but is for money had and received. It is elementary that in such actions, as in all those in general assumpsit, equitable principles govern. The action will lie upon a promise implied in law where necessary to prevent one person from being inequitably enriched at the expense of another.1 Such, in general, I understand to be the theory of this suit.
The complaint alleges that between April 22, 1935 and November 20, 1935 defendant entered into contracts with the United States in which it undertook to deliver to governmental agencies pork products at prices fixed by bids submitted by defendant and accepted by the government. Each contract, the complaint avers, included the following provision: “Prices bid herein include any federal tax heretofore imposed by the Congress which is applicable to the material on this bid.”
It is alleged that, prior to the date set for opening the bids, the rates of processing tax imposed upon the products had been fixed by the Secretary of Agriculture under the supposed authority of the Agricultural Adjustment Act of May 12, 1933. Defendant delivered the supplies pursuant to the contracts and plaintiff paid the full prices bid, which included processing taxes for which defendant was liable under the supposed authority of the act. The complaint sets out a list of the contracts and the amount of processing tax included in the price paid under each contract. Defendant did not pay any of these processing taxes, and has declined to repay the government any part of the amounts received. It is then alleged that by reason of the foregoing defendant is indebted to the plaintiff in the sum of $2,284.68 — the total amount of processing taxes said to have been included in the prices bid. Judgment is prayed for this sum.
*852On the trial the government made proof of the matters alleged, except that, otherwise than as shown by the contracts themselves, no specific evidence was offered that appellee had included the processing tax in its bids. There was further proof that the Comptroller General had examined and settled the claims of the government as prescribed by § 305 of the Budget and Accounting Act of 1921 (ch. 18, 42 Stat. 20, 24, 31 U.S.C.A. § 71).
At the close of the government’s case appellee moved for a directed verdict on the sole ground that there was no evidence in support of the allegation — denied in the answer — that the amount of the processing tax had actually been included in the prices bid. This motion the court sustained.
I think the motion was not well taken. The quoted provision of the contracts raised at least an inference of the inclusion of these taxes. Perhaps in the peculiar circumstances of this case appellee should be permitted to show, if it can, that they were not in fact included. But be that as it may, I think the government made out a prima facie case on this controverted point.
Presumably appellee declined to pay the processing tax because of the assault upon its validity then being waged in the courts. It does not appear whether appellee had enjoined collection, as many other processors were doing at the time. In the Hoosac Mills case the District Court (Franklin Process Co. v. Hoosac Mills Corp., 8 F. Supp. 552) had on October 19, 1934 held the tax valid. Its decision was reversed by the Circuit Court of Appeals of the First Circuit on July 13, 1935. Butler v. United States, 78 F.2d 1. The invalidity of the tax was finally determined by the Supreme Court in its opinion in that case handed down January 6, 1936. United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914.
The contracts made no provision for this eventuality, hence are not controlling. The clause relating to adjustments to reflect future legislative increase or decrease in federal taxes would seem to have been intended as a means of protecting the seller’s margin of profit. The fundamental question here is whether the government is entitled to recover back that part of the bid price which was plainly intended to compensate the seller for the federal tax, legal liability for which was ultimately removed by judicial decision. Wayne County Produce Co., Inc. v. Duffy-Mott Co., Inc., 244 N.Y. 351, 155 N.E. 669.
The view has been taken, on the supposed •authority of the Duffy-Mott case, supra, that the inclusion of the tax in a composite price is fatal to recovery2 Here, the amount of the tax was not segregated in the bids nor set out as a separate item in the contracts. In this sense the price bid was a composite thing. But I am unable to see the logic of holding that this fact alone should be held to nullify the right of restitution where the buyer is otherwise thought entitled to restitution. The tax was not on the sale, but on the processor whether he sold .or not. Where, as in this instance, .the amount of the super-added tax is subject to exact ascertainment by mere mathematical computation, the fact that it is not set up as a separate item ought not of itself be an insuperable bar to recovery. More, the contracts treat the processing tax as an item which was to be segregated in certain contingencies. They provide that, in the event of a change or new imposition, “the prices named in this bid will be increased or decreased accordingly.”
In similar suits between private parties, where recovery was denied, it has usually appeared that there was neither allegation nor proof that the buyer had not passed the tax on to his customers; and in some of these cases this circumstance was made a ground for the denial of the right to recover. G. S. Johnson Co. v. N. Sauer Miller Co., 148 Kan. 861, 84 P.2d 934; Moundridge Milling Co. v. Cream of Wheat Corp., 10 Cir., 105 F.2d 366; Cohen v. Swift & Co., 7 Cir., 95 F.2d 131; Johnson v. Igleheart Bros., 7 Cir., 95 F.2d 4. The holding is necessarily correct, since in order to obtain restitution it must appear, not only that there was an unjust enrichment of one party, but that there was a corresponding loss to the other.3 But here the government has' presumptively sustained a loss-equivalent to the excess amount paid the seller. The United States did not acquire these products as a commercial venture, but for use in governmental operations or for relief purposes.
*853Invoices on deliveries were submitted monthly and the amounts appear to have been paid prior to the Supreme Court decision holding the taxing act invalid. Hence, the excess payments should be deemed to have been made under mistake of law. The rule sometimes applied that money paid under mistake of law cannot be recovered is not applicable to payments by public officers of the United States. Wisconsin, etc., Ry. v. United States, 164 U.S. 190, 17 S.Ct. 45, 41 L.Ed. 399; Badeau v. United States, 130 U.S. 439, 9 S.Ct. 579, 32 L.Ed. 997.
I think the government made a prima facie showing of the possession by appellee of a sum of money which in good conscience appellee is not entitled to keep.
Lash’s Products Co. v. United States, 278 U.S. 175, 49 S.Ct. 100, 73 L.Ed. 251, is frequently cited as authority for this proposition. But that case involved merely the construction of a statute imposing a sales tax.
Restatement, Restitution § 1.